Page 131 - Records of Bahrain (6)_Neat

Revision oj royalties 119

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bullding up future oourooo of rovonuo to compensate,
purtly, for u deoreuuing inoomo when oil revenues

dooliue. livery your tho Government invouta port of
the Iuooiqo iu rovouuo producing oohomos but it ounnot
afford capital expenditure on important schemes ouoh as
big ugrioulturul projects without increasing ita rovonuo
frou oil.

V. In most oil oonooooioua tho Qovornraonto con-
oornod roceivo substantial puywonts in addition to tho
royalty; no ouoh payments uro iaudo by tho Bahrain petro-
loujfl Coiapuny. Hoviuions of oil oonoooiiiono and oil laws
iu other oountriou during rooont youra appear to establish
tho principle thut after an initial period of high retui’na
to the Coiapuny there uhould be upproximutoly an oqual
division of nut revenue between Ooiapuny und Government.

In liahraiu the Coiapuny hus boon produoing oil for fifteen
years at a oumpurutively low oout without any revision
of ita obligations to the Government. Tho Coiapuny it­
self profits considerably from the sorviooa provided by
the Government ouoh as protection, oduoation, public

houith muauuroo, roads and the various amenities which
ootuo from u 3tublo and orguniuod Government, A oorn-
purisou might be uuggeotod with oondltlons in the neigh­
bouring status whore oil companies are operating, Largo
uroau of land havo boon grunted to the Company by tho
Govormaent whose value hus risen very greatly oinoo the
grunts wore mudo. Tho Ooiapuny pays no tuxes for thooo

udvuntugeu which it enjoys, which are provided by the
Coyornmout, but tho advantages coot money and they oout
more money every yoar,
0. Tho Government ooiioiderod proposing that tha

revised royulty uhould consist of u percentage of tho oil
produced, converted to cash with ugrood prioo formula, as